Start out small, allow for many mistakes and repeat the rules a lot. In fact the first time should probably be about them creating their chars, unless you're doing pregens. Let them come up with ideas, ask leading questions like, how does your char know his/her char? How did he/she end up meeting? And introduce the World in small packages. If they ask questions, great, if not, try to answer the questions you would have. But once again, keep the text to a minimum, start out by learning mostly through doing.

Try to accomodate them and not get mad if they fool around, but don't let it go overboard, you should definately schedule one or more pauses in, if it seems needed. If there's time left to play, try to end it on a Cliff-hanger.

And finally, after the session, ask them for input.

I'll keep a look out for articles on this subject and post them as well.

Pretty much what it says on the can. A special note on the group template -- it's kinda what Gossamer was hinting at with all the questions during character creation. If you can create a cohesive party to begin with, your game will go much more smoothly, and your players will start out more invested in the game and in the world.

Another idea: start out with a modern-ish setting with fantasy elements, like the Dresden Files RPG. That system practically forces your guys to create a group template anyway, and might be a good way to transition. Another oldie but goodie is White Wolf's World of Darkness -- Vampire: The Masquerade, Werewolf: The Apocalypse and the like. That way you still have familiar things like guns and cars, but are slowly introducing the rest of the magical stuff you might want for later games.

Use a simple system. New people get scared away by complicated character sheets.

In my experience, most first timers have seen Lord of the Rings, so they at least know what wizards and orcs are. And if you play a pseudo-fantasy setting instead of a modern one, people are (maybe) less likely to make characters that aren't just projections of themselves*.

*(A lot of experienced players don't mind playing an asthmatic dwarf or a warlock without a nose. This trait is rarer in newer players, because their characters are oftentimes their literal avatars, which is why they want them to be cool and badass.)

Unfortunately I can't listen to or watch the podcasts where I am, could you run up a brief summary of them for me please Dossta?

I'm very lax on rules and character creation for now, because it's new to them and as you say, too much can scare them off.

Their current (and 1st) characters are pretty much, as Forganthus said, avatars of themselves, albeit much more able and badass I did try to, in small steps, draw them away from that but it seems to be something they always slip back into. Are there any good ways, that aren't too forceful, of preventing this from occuring too often?

*(A lot of experienced players don't mind playing an asthmatic dwarf or a warlock without a nose. This trait is rarer in newer players, because their characters are oftentimes their literal avatars, which is why they want them to be cool and badass.)

Hmm, I wonder if I'm guilty of that... Or maybe everything I touch turns into awesome... A question for the great philosophers to ponder.